Stockholders' Equity

3 Months Ended

Mar. 31, 2023

Stockholders' Equity Note [Abstract]

Stockholders’ Equity

Stock Option Plan

In June 2020, the Company's stockholders approved the 2020 Stock Plan, which was adopted by the Company’s Board of Directors in March 2020 subject to stockholder approval. The 2020 Stock Plan provides for the grant of incentive stock options to employees and for the grant of non-statutory stock options, stock appreciation rights, restricted stock and restricted stock units to employees, directors and consultants.

A summary of the activities related to the Company’s stock option plans is as follows:


		Options Outstanding
	Shares Available for Grant	Number of Shares	Weighted- Average Exercise Price (per share)		Weighted-Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value (in thousands)
Balances as of December 31, 2022	16,454,103	19,896,861	$	242.22
Granted	(591,343)	591,343	317.39
Exercised	—	(412,158)	62.29
Expired	—	(574)	13.14
Balances as of March 31, 2023	15,862,760	20,075,472	$	248.14	5.58	$	2,545,760
Vested and expected to vest as of March 31, 2023		20,075,472	$	248.14	5.58	$	2,545,760
Exercisable as of March 31, 2023		20,014,050	$	247.85	5.56	$	2,544,913

The aggregate intrinsic value in the table above represents the total pretax intrinsic value (the difference between the Company’s closing stock price on the last trading day of the first quarter of 2023 and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders had all option holders exercised their options on the last trading day of the first quarter of 2023. This amount changes based on the fair market value of the Company’s common stock.

A summary of the amounts related to option exercises, is as follows:


	Three Months Ended
	March 31, 2023		March 31, 2022
	(in thousands)
Total intrinsic value of options exercised	$	116,310	$	114,762
Cash received from options exercised	26,028		13,678

Stock-based Compensation

Stock options are generally vested in full upon grant date and exercisable for the full ten year contractual term regardless of employment status. Stock options granted to certain named executive officers vest on the one-year anniversary of the grant date, subject to the employee’s continuous employment or service with the Company through the vesting date. The following table summarizes the assumptions used to value option grants using the lattice-binomial model and the valuation data:


	Three Months Ended
	March 31, 2023			March 31, 2022
Dividend yield	—		%	—		%
Expected volatility	46		%	38		%
Risk-free interest rate	3.63		%	1.71		%
Suboptimal exercise factor	4.22			4.71
Weighted-average fair value (per share)	$	186		$	228
Total stock-based compensation expense (in thousands)	$	99,099		$	119,209
Total income tax impact on provision (in thousands)	$	21,711		$	26,413

Stock Repurchases

In March 2021, the Company’s Board of Directors authorized the repurchase of up to $5 billion of its common stock, with no expiration date. Stock repurchases may be effected through open market repurchases in compliance with Rule 10b-18 under the Exchange Act, including through the use of trading plans intended to qualify under Rule 10b5-1 under the Exchange Act, privately-negotiated transactions, accelerated stock repurchase plans, block purchases, or other similar purchase techniques and in such amounts as management deems appropriate. The Company is not obligated to repurchase any specific number of shares, and the timing and actual number of shares repurchased will depend on a variety of factors, including the Company’s stock price, general economic, business and market conditions, and alternative investment

opportunities. The Company may discontinue any repurchases of its common stock at any time without prior notice. During the three months ended March 31, 2023, the Company repurchased 1,222,056 shares for an aggregate amount of $400 million. As of March 31, 2023, $4.0 billion remain available for repurchases. Shares repurchased by the Company are accounted for when the transaction is settled. As of March 31, 2023, there were no unsettled share repurchases. Direct costs incurred to acquire the shares are included in the total cost of the shares.